Friday, May 15, 2009

Strategic Planning Analogy #257: Dated Thinking

THE STORYThe dating process has always seemed a bit odd to me. In many cases, people are dating in order to find the person that they want to spend the rest of their life with, someone compatible with their lifestyle. Yet, when these people are on a date, they are acting differently than their normal lifestyle.

For example, they may be a slob, but they dress up and clean up their place for a date, something they would not otherwise do. They may drink the cheap beer when alone, but consume the good stuff on a date. They may love to spend their evenings watching TV, but endure the theater and museums on a date.

How are you supposed to find someone compatible with your lifestyle, if you never live your normal lifestyle in their presence? It makes me wonder how many businesses would go bankrupt if people stopped acting differently on dates. And it does not surprise me that many are disappointed after getting married, because their new spouse stops the unusual activity from the dating and go back to their “normal” ways.

I am reminded of a story I heard from my high school guidance counselor. He said there was a woman who didn’t want the man she was dating to know she was wearing braces, so before her dates she would yank out her braces. After the date, she would push them back in. Ouch!!

THE ANALOGYDating is an occasion where people can act differently from “normal.” As it turns out, it is not the only one. It could be time of the day—like drinking coffee in the morning, but never in the evening, for example. It could be time of the month—depending on how close it is to when you last got paid. Behavior can change between when you are with your friends at home versus with your boss at work.

As it turns out, there typically really isn’t a “normal” way of life for a particular individual. The behavior changes based on the occasion. Each occasion creates its own type of normalcy. It is as if we take on a different role depending on the particular occasion. I may have my “Dating” role, my “Being at Work” role, my “Being a Parent” role, my “Being with Friends Role,” and so on.

There is actually more consistency in behavior based on a particular occasion/role than there is in the total life of an individual. For example, behavior on a date may be different than behavior when not on a date, but the behavior when dating is relatively consistent whenever the dating occasion comes up.

Therefore, when creating a strategy, it is better to target the relatively consistent needs for a particular occasion than to target inconsistently-acting individuals.

THE PRINCIPLEThe idea here is that strategies focused on occasion-based solutions tend to be more effective than strategies which target individuals. Individuals slip in and out of roles depending on the occasion. Their needs and desires change based on the occasion. If you try to target one individual all the time, your appeal will have varying degrees of success, depending on which role the individual is playing at a particular time.

As a result, even though there is much talk these days about being customer-centric, real success comes from being solution-centric.

Restaurant ExampleFor example, let’s look at how an individual, let’s call him “Bob,” uses restaurants. When Bob is on a date, he may be looking for a restaurant that is romantic, that would impress his date. When Bob wants a meal to eat while working late at the office, he may be looking for convenience, low price, and delivery services.

If Bob is having an important business dinner, he may want someplace which is quiet, where they don’t mind if you linger, and shows off his financial strength (i.e., expensive and snooty). When eating out with his children, he may want a restaurant that is moderately priced and kid-friendly. If Bob wants a meal when alone at home, he might skip the restaurant altogether and just nuke something in the microwave.

As a restaurant owner, what would be the best restaurant approach if the strategy is to target Bob? The restaurant would need to be romantic, quiet, kid-friendly, snooty, expensive, cheap, moderate, quick, lingering, and sells things to take home and microwave. Good luck on that one.

There is no single ideal restaurant strategy to target at Bob, because Bob’s needs and desires change based on the occasion. He wants a different type of restaurant for each occasion. If you try to create one restaurant appropriate for all of those occasions, it will not be able to be the best at any particular occasion. The irony is that a single restaurant specifically designed to meet all the restaurant needs of Bob would most likely be a restaurant Bob would hate to visit, because it would never be the best option for any of his occasions/roles.

A better restaurant alternative would be to stop targeting particular people and instead start targeting a particular occasion, like being the ideal restaurant for dating. That way, when Bob is going on a date, your restaurant will be the best choice for that occasion. It doesn’t matter that Bob would never choose you for his other roles, because you are no longer targeting Bob. You are targeting anyone who is looking for the ideal dating restaurant at a particular moment. If there are enough people drifting into the role of looking for a dating restaurant solution, then you don’t have to worry about missing the other occasions.

By choosing a particular occasion, you can focus on being the best at delivering the attributes most important to that occasion. You can downplay attributes less important so that you can afford to do a better job on the ones which are important to the occasion. For example, a dating restaurant could afford to do a more effective job of being romantic, because it does not have to worry about also trying to be kid-friendly. Your brand is strengthened, because it stands for something—the best choice for a particular occasion.

Other BusinessesThis principle does not just apply to consumer activities, like eating out. This also can work in pretty much any business, including industrial businesses. For example, a steel supplier could focus any one of a number of occasions:

a) When you need a problem solved in a hurry/emergencies;b) When you need highly customized and unique solutions;c) When you need basic commodities;d) When you are having cash flow challenges;e) When your project is in a particular area, like the Middle East.

By focusing on one of these occasions, the steel supplier may not get all of the total business from Bob’s Construction Company, but they have a better shot at getting all the business from Bob’s Construction Company when it falls into that particular occasion.

Portfolio of BrandsIf you want to satisfy more than one occasion, it is usually better to do so under multiple brands, with each brand owning a different occasion segment. That way, each brand can specialize and own that occasion in the mind of the customer. The individual brands stay pure and don’t get diluted by trying to stand for too many things.

For example, the Lettuce Entertain You Group operates 38 separate restaurant brands. Each brand has its own name and specializes in something different. There are brands for formal occasions, casual occasions, convenience occasions, and so on. Each brand is well known in its location for its occasion segment. And none of the customers really know about or care about the parent company name.

By contrast, the Chevrolet brand is slapped on cars meeting all sorts of different needs, from economy (Aveo) to sports car prestige (Corvette). For many of the cars in the Chevrolet lineup, I’m not sure I even know what need they are trying to solve (Cobalt?). Blandness and lack of brand focus is not a path to success.

SUMMARYSuccessful strategies are usually based on being the best at solving some sort of problem for the customer. Consequently, even though there is a lot of talk these days about being customer-centric, real success comes from being solution-centric (or occasion centric). By focusing on a solution/occasion, one can become the best at the attributes most important to that occasion. The same cannot be said of a consumer focus, since consumers tend to drift in and out of problems, depending on the situation of the moment. There is no single strategy that is right for a consumer under all the different situations they encounter, and to try to meet them all under one brand can be a disaster.

FINAL THOUGHTSEventually, people like Bob may settle down, get married, and no longer be a part of the dating scene. Life-stage changing events like these can drastically change what someone like Bob is looking for. Therefore, trying to follow Bob through his life changes can be difficult, because it would require you to make drastic changes over time (for which you may not be capable of being the best at) and which might confuse the brand. It is probably better to stick to being known as the best dating restaurant, abandon Bob, and get the next generation of daters. For more on this, see prior blog.

About Me

I have over 25 years of experience, having worked in strategy with a number of leading US retailers. You can learn more about me by visiting my digital resume (www.VisualCV.com/geraldnanninga) of the site for consulting (http://planninga-from-nanninga.webs.com)